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breached the contract in early 2007,
thereby rendering the City’s claims
time barred.
The Second District Court of
Appeal disagreed, holding that the
five-year statute of limitations for an
action based in contract was applicable
to the City’s breach of contract claim
and that the City’s bond claim accrued
when the developer abandoned the
project in March 2007.
The Second DCA relied on well-
settled law that the surety’s liability to
the obligee is based on the liability of
its principal. Lexon Ins. Co., 238 So. 3d
at 359 (relying on Am. Home Assurance
Co. v. Larkin Gen. Hosp., Ltd., 593 So.
2d 195, 198 (Fla. 1992)). In Lexon,
the bonds obligated the principal, the
developer, to construct improvements
on the project. When the developer
failed in its obligation, the City’s cause
of action accrued.
While surety bonds are a type of
insurance contract, the unique and
distinct nature of the surety contract
bases the surety’s liability on the
liability of the principal. The
principal’s default “was the act that
breached the bonds and started the
running of the statute of limitations”
— not the City’s demand for
damages. Id. at 360. So the statute
of limitations began to run in March
2007, when the developer abandoned
the project.
Suretyship is undoubtedly a difficult
area of law to navigate, but the Lexon
case further clarifies
and provides more
certainty as to when
a surety’s obligation
under a bond
begins to accrue.
Construction Law Section Luncheon
on september 20, the Construction law section held their first luncheon of the new
Bar year, where they received an informative presentation on construction defect cases
involving roofing. the speaker, lance Manson, who is a senior consultant and registered
roof consultant at delta engineering and inspection, inc., discussed ways to measure
and vet experts for roof construction defects cases, and the investigative tasks required
for each roof system type. Manson also gave examples of various cases that illustrate
the importance of an expert’s experience and the method of investigative tasks used to
prepare for a successful litigation.
Author: Angie
M. VandenBerg -
Moyer Law Group
NOV - DEC 2018
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HCBA LAWYER
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